Tuesday, January 23, 2018

"Uber's Soap Opera May Not Be Over"

From Bloomberg Businessweek January 22:

SoftBank helped save the day, but it brings some dramatic tension of its own.

It's tempting to believe the high drama is ending at Uber. Don't bet on it.

Yes, the company is moving past its year of hell. Travis Kalanick has been locked out of the chief executive suite, at least for now. Thanks to stock purchases
led by SoftBank Group Corp., Kalanick and a number of other Uber
stockholders cashed in some of their equity for a windfall. The stock
transaction also ended a bitter feud that pitted
one of Uber Technologies Inc.'s largest stockholders against others.
Minefields still exist, but Uber seems to be making pragmatic, grown-up
decisions perhaps for the first time in its history.

But
Uber wouldn't be Uber without the possibility of fireworks. And
SoftBank, which helped save Uber from its drama, might be the one
lighting the fuse.

Check out what a senior SoftBank executive said within hours of the
Japanese conglomerate becoming Uber's largest shareholder. Rajeev Misra told
the Financial Times that Uber was better off focusing on its core
markets including the U.S., Europe, Latin America and Australia.
Translation: Uber's newest and biggest part-owner wants the company to
pull back from offering rides in places like Southeast Asia, the Middle
East and Africa.

Notably,
those are regions in which SoftBank or its technology investment fund
owns pieces of Uber rivals such as Grab in Southeast Asia and Ola in
India. It seems SoftBank doesn't want its children to squabble among
themselves -- or engage in costly wars for market share.

On
the face of it, it's entirely sensible for Uber to weigh whether it
should stick with the dozens of countries in which it operates. Already,
Uber stopped doing business in China and Russia after it was too tough to compete with established local competitors. I've suggested that
SoftBank could help Uber make a similar graceful exit from some of its
overseas markets. That's essentially what Misra is saying, too, and I'm
sure at least some Uber executives and stockholders are on board with
the idea....MORE

Misra isn't just any "senior SoftBank executive". He's the guy Mr. Son chose to oversee the $100 billion Vision Fund, an Uber director, a SoftBank director and former
Global Co-Head of fixed income, currencies and commodities at UBS.

As the writer of this piece, Shira Ovide says up top:

It's tempting to believe the high drama is ending at Uber. Don't bet on it.